They say that the best laid plans of mice and men are doomed to fail. Though that saying might take you back to GCSE English, it is also applicable to many of the plans that have been formulated over the past year since the Coronavirus pandemic hit.
The unprecedented effects of the pandemic have caused havoc across all walks of life. But while it may have disrupted plans contractors and freelancers have had around buying their own home, there is a chance that it might not be time to go back to the drawing board just yet.
A major lender in the mortgage industry, Bluestone Mortgages, has updated the criteria by which it assesses the feasibility of lending to self-employed workers. This could open the door to more contractors and freelancers getting the perfect mortgage for their situation.
What changes have been made?
Bluestone Mortgages has updated its lending criteria for self-employed workers, and the new terms are favourable for contractors and freelancers.
The new criteria takes into account the fact that many self-employed workers have had their finances hit hard because of the pandemic.
Their offering will therefore be particularly suited to you if you are a contractor or freelancer who was in a strong financial position pre-pandemic, but has been hit hard by the pandemic. The new criteria Bluestone is using will apply to applicants who have seen their income drop by more than 10% because of the pandemic.
Any self-employed workers that match this description will see Bluestone ‘use the applicant’s 2019/2020 income where they can demonstrate earnings in the most recent three months have returned to that level.’
Other factors Bluestone will be considering include how the applicant’s business was affected by the pandemic, as well as the sustainability of income moving forwards for the applicant and whether government support loans have been utilised by the applicant.
What does this mean for me?
If you are a freelancer or contractor who was eyeing a mortgage up pre-pandemic but have been hit hard, this means all might not be lost. Bluestone is entertaining the possibility of providing mortgages for applicants such as you, so if you are still keen to get your mortgage plans over the line, this could be a good option.
What this move from Bluestone may also do is set a precedent which other lenders will follow. With the pandemic reaching a point where we can tentatively start to look forward with some hope, other lenders could be more willing and flexible when it comes to offering mortgages to self-employed workers who may have been pandemic-affected.
If your last year of income as a freelancer or contractor is not truly reflective of your overall financial position, then offerings such as that which Bluestone is making could be the pathway to securing the mortgage you want.